Key Highlights

• BP's Castrol unit, valued between $8–10 billion, attracts bids from Reliance, Aramco, and private equity firms.
• Following acquisition news, Castrol India's shares surged over 7%, reflecting investor optimism.

Major global players, including India's Reliance Industries and Saudi Aramco, as well as private equity firms Apollo Global Management and Lone Star Funds, have expressed interest in BP Plc's Castrol lubricant division.

With a potential value of $8 billion to $10 billion, the deal would rank among the biggest sales of energy assets that are currently taking place.

BP has started sending out initial information about the unit to prospective purchasers, including international investment firms Stonepeak Partners and Brookfield Asset Management.

Saudi Aramco leads potential bids

According to reports, Saudi Aramco is thinking about buying Castrol outright or in part. Formal bids are anticipated in the upcoming weeks, although the talks are still in their early phases.

Banks are putting together debt packages of up to $4 billion to help finance the possible deal. These packages will probably include leveraged loans and high-yield bonds that are offered in both US dollars and euros to appeal to a variety of investors.

Castrol's presence in India has drawn Reliance and Aramco

Reliance and Aramco have expressed interest in Castrol due to its robust presence in quickly expanding markets like India. At the moment, Castrol India Ltd., a publicly traded company in Mumbai, is worth about $2.4 billion. At 9:45 a.m. on May 29, Castrol India's stock was up over 6% on the BSE.

Also Read: Reliance Power Shares Rise 4% on Rs 2,000 Cr Solar JV with Bhutan

BP's strategic reset is driving the move

Castrol's possible sale is a component of BP's broader restructuring initiative, as the company faces pressure to optimize its portfolio. Elliott Investment Management, an activist investor who pushed for change and became a sizable shareholder, initiated the strategic review.

Falling crude oil prices have lowered revenue expectations and may hasten the need to sell high-value assets, which presents a challenge to BP's plans. Castrol, which also develops liquid cooling systems for AI data centres, is viewed as a valuable asset by buyers interested in both traditional energy and emerging technology.

BP's share price has fallen by nearly 9% year to date, putting the company's market value at approximately £57.1 billion.